Informational based transaction liability allocation

Abstract

Apparatus and methods for allocating transaction liability are provided. Transaction liability may include a risk that the transaction may incur a post-authorization charge, such as a fraud investigation and/or a chargeback. The transaction liability may be allocated among one or more transaction participants. Transaction liability may be allocated based on a stock-keeping-unit of an item purchased by customer that initiates the transaction. Transaction liability may be allocated based on an amount of the transaction. Transaction liability may be allocated based on a merchant category code identifier assigned to a merchant. Transaction liability may be allocated based on a location of a merchant. A default allocation of transaction liability may be re-allocated among transaction participants based on level of verification performed by a transaction participant at a point-of-sale.

What is claimed is: 
     
         1 . A computer that shifts a risk associated with a transaction initiated by a customer using a payment instrument, the computer comprising:
 a non-transitory computer readable medium having computer readable program code embodied therein; and   a processor configured to execute the computer readable program code;   the computer readable program code when executed by the processor:
 identifies the transaction initiated using the payment instrument as a debit transaction; 
 in response to identifying the debit transaction, shifts a first percentage of the risk associated with the debit transaction from an issuer of the payment instrument to at least one other transaction participant; 
 in response to the shift of the first percentage of the risk, requests that the at least one other transaction participant transmit to the issuer a verification of a relationship between the customer that initiated the debit transaction and the payment instrument; 
 in response to receiving the verification from the at least one other transaction participant, shifts a second percentage of the risk associated with the debit transaction from the at least one other transaction participant to the issuer. 
   
     
     
         2 . The computer of  claim 1 , wherein the at least one other transaction participant comprises a merchant that accepts the debit transaction as payment for goods sold to the customer. 
     
     
         3 . The computer of  claim 2  wherein the at least one other transaction participant comprises an acquirer bank that processes the debit transaction on behalf of the merchant. 
     
     
         4 . The computer of  claim 3  wherein the at least one other transaction participant comprises a transaction network that links the acquirer bank, the merchant and the issuer. 
     
     
         5 . The computer of  claim 2 , the computer readable program code when executed by the processor in response to the shift of the first percentage of the risk, requests that the merchant obtain from the customer and transmit to the issuer:
 information printed on the payment instrument; and   a zip code associated with the payment instrument.   
     
     
         6 . The computer of  claim 2 , the computer readable program code when executed by the processor in response to the shift of the first percentage of the risk, requests that the merchant obtain from the customer and transmit to the issuer:
 a scan of a barcode printed on a photo identification presented by the customer; or   a change to a transaction network selected to process the debit transaction.   
     
     
         7 . The computer of  claim 2 , the computer readable program code when executed by the processor in response to the shift of the first percentage of the risk, instructs the merchant to:
 view a photo identification of the customer that initiated the debit transaction; and   transmit to the issuer a confirmation that information displayed on the photo identification corresponds to information displayed on the payment instrument.   
     
     
         8 . The computer of  claim 1  the computer readable program code when executed by the processor determines the second percentage of the risk based on a level of verification transmitted from the at least one other transaction participant to the issuer. 
     
     
         9 . The computer of  claim 8  wherein the level of verification corresponds to a ratio of a first number of queries presented to the customer and a second number of responses provided by the customer. 
     
     
         10 . The computer of  claim 1  wherein the first percentage is greater than the second percentage. 
     
     
         11 . The computer of  claim 1  the computer readable program code when executed by the processor determines the second percentage based on comparing the verification received from the at least one other transaction participant with information in possession of the issuer. 
     
     
         12 . The computer of  claim 1  the computer readable program code when executed by the processor initiates a transmission to the at least one other transaction participant before the shift of the first percentage, the transmission comprising:
 the first percentage of risk; 
 the request for the verification; and 
 the second percentage of risk. 
 
     
     
         13 . The computer of  claim 12  the computer readable program code when executed by the processor:
 receives, from the at least one other transaction participant, a waiver of the shift of the second percentage; and 
 processes the debit transaction without the shift of the second percentage. 
 
     
     
         14 . The computer of  claim 1 , wherein the risk comprises a cost to investigate a claim submitted to the issuer of the payment instrument alleging that the debit transaction is fraudulent. 
     
     
         15 . One or more non-transitory computer-readable media storing computer-executable instructions which, when executed by a processor on a computer system, perform a method of dynamically allocating a risk of accepting a debit transaction as payment for a purchase, the method comprising:
 receiving a request from a customer to initiate the debit transaction as payment for the purchase;   identifying a level of verification for the purchase;   in response to the identifying, allocating a percentage of the risk among at least two transaction participants that process the debit transaction;   in response to the allocating, receiving the level of verification from at least one of the transaction participants;   in response to receiving the level of verification, reducing the percentage allocated to the at least one of the transaction participants.   
     
     
         16 . The computer-readable media of  claim 15 , wherein the at least two transaction participants are:
 a merchant that accepts the debit transaction as payment for goods;   an acquirer bank that processes the debit transaction on behalf of the merchant;   an issuer of a payment instrument used by the customer to initiate the debit transaction; or   a transaction network that links the acquirer bank, the merchant and the issuer.   
     
     
         17 . The computer-readable media of  claim 15  wherein, in the method, when the at least one transaction participant is a merchant that that accepts the debit transaction as payment for goods, the allocating of the risk comprises reducing a monetary value of a payment guarantee issued to the merchant by an issuer of a payment instrument used by the customer to initiate the debit transaction. 
     
     
         18 . The computer-readable media of  claim 15 , the method further comprising allocating the risk among the at least two transaction participants in a manner that is proportional to a difference between:
 a first interchange fee charged to process the debit transaction as payment for the purchase; and   a second interchange fee charged to process a credit transaction as payment for the purchase.   
     
     
         19 . The computer-readable media of  claim 15 , wherein in the method, the risk comprises:
 a cost of responding to an allegation that the debit transaction was fraudulently initiated; and   a cost of a chargeback of the debit transaction.   
     
     
         20 . The computer-readable media of  claim 15 , the method further comprising dynamically allocating the risk based on a value of the purchase. 
     
     
         21 . The computer-readable media of  claim 15 , the method further comprising dynamically determining the level of verification based on a value of the purchase. 
     
     
         22 . The computer-readable media of  claim 15 , the method further comprising:
 after the receiving and before the allocating presenting the percentage of the risk to the at least one transaction participant; and   in response to a rejection by the at least one transaction participant of the percentage, processing the debit transaction without providing a payment guarantee issued to the at least one transaction participant.   
     
     
         23 . An article of manufacture comprising a computer usable medium having computer readable program code embodied therein, the code when executed by a processor apportions a risk of accepting a debit transaction initiated by a customer using a payment instrument as payment for a purchase, the computer readable program code in said article of manufacture comprising:
 computer readable code that determines a threshold risk of incurring a cost for the debit transaction after the purchase; and   computer readable code that, in response to detection of the threshold risk, transmits to a merchant selling the item, an offer of a payment guarantee for the purchase in exchange for providing an issuer of the payment instrument verification of a relationship between the customer and the payment instrument.   
     
     
         24 . The article of  claim 23  further comprising computer readable code that processes the debit transaction without the payment guarantee. 
     
     
         25 . The article of  claim 23  further comprising computer readable code that implements the verification of the relationship by prompting the merchant, before authorizing the debit transaction, to transmit to an issuer of the payment instrument, at least two of:
 a scan of a barcode printed on a photo identification presented by the customer; 
 a change to a transaction network selected to process the debit transaction; 
 confirmation that information displayed on a photo identification of the customer that initiated the debit transaction matches information displayed on the payment instrument; 
 information printed on the payment instrument; or 
 a zip code associated with the payment instrument.